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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Dave who wrote (24632)	1/21/2004 6:40:32 PM
From: FlameMe	Read Replies (1) \| Respond to of 60323

Yes, the increase in tax rate was expected i'm sure. In fact, I think the analysts could ratchet up their estimates by a very small amount if they wanted to take the optimistic view. I just think the margin compression could keep the earnings from showing any sequential improvement for the second half and that throws a real wet blanket on the stock. You need over $500 million in revenues at 28% margins to just meet this quarter's operating income. Throw in higher sg&a and higher tax rate and you need much more. I imagine that they are being conservative and the gross margins will be at least 32%, probably higher, but who knows.

To: Dave who wrote (24632)	1/21/2004 6:42:24 PM
From: FlameMe	Respond to of 60323

ps. all good points about the shares outstanding and the cash.

To: Dave who wrote (24632)	1/21/2004 6:54:48 PM
From: Howard R. Hansen	Read Replies (3) \| Respond to of 60323

Next, while cash is good, SNDK has excess cash on its balance sheet. They need to figure out a place to put it since it is reducing it's overall Return on Capital. In 2004, SNDK will be "investing" that cash in a new marketing strategy which is an "intangible" item. Most of the cash on SanDisk's balance sheet is committed to fund SanDisk's share of the cost of a new fabrication plant they and Toshiba are building. SanDisk's share of the cost is around 900 million.